CRITICAL ILLNESS” THE REALITY SALE ”
In order to sell a critical illness product, you must
understand how they work. If your client is diagnosed with
one of a number of critical illnesses (cancer, heart attack,
stroke, kidney failure, etc as defined in the policy) the
product will pay a lump sum benefit to the insured. The key
is that payment is triggered IMMEDIATELY UPON DIAGNOSIS!
Benefits are not tied to any reimbursement of expenses and
the money can be used by your client in any manner they
choose. Let’s take a look at the ways in which most people
spend the proceeds of a critical illness product and in
doing so, uncover some hidden marketing opportunities.
HOW THE MONEY IS SPENT
According to industry surveys, the three most common uses of
a critical illness payout are: pay off debts, primarily the
mortgage, cover out of pocket medical expenses and replace
income/savings.
PAY OFF THE MORTGAGE
Many of us sell mortgage life insurance and yet, according
to HUD, only 3% of all home foreclosures are the result of a
death. In reality, nearly 50% of foreclosures are the result
of severe financial hardship caused by a major illness. In a
2005 study published by Harvard University ( Illness and
Injury as contributors to Bankruptcy, Health Affairs, Winter
2005) nearly 50%of all bankruptcies in the U.S. were the
result of a medical emergency. Simply stated, it is far more
likely that our clients would lose their homes as the result
of a critical illness than from death. Does it not therefore
make sense to protect your clients assets with a critical
illness policy?
OUT OF POCKET MEDICAL EXPENSES
With today’s major medical products, both group and
individual, people are faced with potentially five
categories of out of pocket expenses: 1) deductibles 2)
co-pays 3) co-insurance 4) out of network charges 5)
experimental treatments. Do the math yourself and you will
find any combination of these could result in your clients
spending significant dollars out of their pockets. That is
why there has been generally strong success by agents who
have sold critical illness as a supplement to all major
medical plans sold to individuals or as a voluntary benefit
to groups at the worksite.
REPLACE INCOME
In my opinion this is where the strength of the product
truly lies….as a source for needed funds in times of a
medical emergency. Critical Illness is not disability
insurance; however, it has so many related applications.
Consider these other potential markets:
1) As a supplement to highly paid professional whose
existing DI benefits fall short of covering an adequate
amount of income.
2) As an alternative product for individuals working in
occupations that are traditionally not eligible for DI.
3) For stay at home spouses or self employed individuals
working out of their home, who do not qualify for any type
of DI.
At a time of medical emergency, when CASH may be the
greatest need your client has, critical illness insurance is
the ONLY product that meets your clients needs. DON’T LEAVE
THEM UNPROTECTED.
DID YOU KNOW ?
This year about 1.2 million Americans will suffer a heart
attack and nearly 60% will survive?
The cost associated with a cancer diagnosis average $146,000
per patient?
About 5.4 million stroke survivors are alive today, many of
them with permanent stroke-related disabilities?
Make sure your clients have protection against these risks
through a product like Critical Care!
Illness and Injury as
Contributors to Bankruptcy, Health Affairs, February, 2005.
American Cancer Society, Cancer Facts and Figures, 2005.
American Heart Association, Heart Disease and Stroke
Statistics, 2005.
